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Nothing like Christmas and the rolling of one year into the next for a little reflection. A chance to think a little more broadly than the daily minutia. And to catch up with friends and family that we haven’t seen for a while.
For me, this included a lot of us in our early fifties. I sensed a common theme in the discussions – everyone seems pretty sick of striving for a promotion or more money. We didn’t talk specifically about retirement savings, but I got the impression that everyone had a pretty good level of comfort about being “on track”.
Our retirement saving scheme in Australia only allows withdrawals from age 60, and the aged pension kicks in at 67. So unless you’re a very rare individual with significant savings outside of our retirement scheme, work will continue until to at least 60, maybe longer.
So here we sit, roughly a decade from hanging up our boots. The drive to earn more and save more has faded somewhat – why bust ourselves when it will likely have little impact on the timing or quality of our retirement?
I got a real sense from others of something that I’ve been feeling lately – shifting from a mindset of going above and beyond, striving for greater and greater things, to an approach of really looking to enjoy life more and be less focused on what happens from “9 to 5”. This shift should be easy – but decades of dedication becomes a hard habit to break.
Bringing this back to the HD realm, I feel like the next ten years will see many of my contemporaries embracing a shift towards retirement. Using all our annual leave, taking more holidays, less overtime, more time spent on things that enhance our lives.
And I suspect that this will become quite common here in Australia. With a compulsory saving rate of 12%, many people will be well and truly on track to retirement by the time they hit 50. But demographic pressures in Australia, and most developed countries, will mean that government policies will slant towards to keeping people in the workforce as long as practicable.
With a compulsory 12% are there many people able to save above that level?
I think there are probably a few issues at play. Firstly, when everyone is saving 12% of their income, there is little impetus to save move. Secondly, as you suggested, saving 12% will leave less to save. Thirdly, Australian housing costs are quite high, especially compared to the US. According to https://worldpopulationreview.com/country-rankings/affordable-housing-by-country our house price : income index is 8.1, compared to the US at 3.3. This obviously impacts both home owners and renters. So after housing costs, there is even less left to save.
It sounds like a real shift in the landscape, Greg. You could be looking at a significant increase in the over-50s seeking part-time or flexible arrangements.
If you think about it, it’s a model that actually makes a lot of sense for everyone involved. You could have two experienced people sharing what was previously one full-time role—essentially “job-sharing” their way toward retirement. On one hand, it gives the over 50s the lifestyle balance they’re craving, but more importantly, it starts to clear the path for the younger generation.
By stepping back slightly, you create the space for younger employees to step up into those more senior roles. It’s a natural way to facilitate career progression and create fresh job opportunities, while still keeping that veteran experience in the building to mentor the next wave. It might be a practical solution to the pressure you’re describing in Australia.
Agreed Mark, it will be interesting to see how both employees and employers adapt over time to this last decade of work.